Equalization payments are B.C.'s biggest worry
Vancouver Sun
June 2, 2006
By: Vaughn Palmer

VICTORIA - With a new national government, the B.C. Liberals have been experiencing some ups and downs in the formerly all-smooth federal provincial relationship.

Premier Gordon Campbell got along well with the previous federal government and has tried to accommodate new prime minster Stephen Harper as well. Still challenges remain. A rundown of the main federal initiatives, in roughly the order in which they came at the province in recent weeks:

Child care. B.C., like other provinces signed on to the previous government's program, which provided funding to create spaces for child care. But the B.C. Liberals have not joined other provinces in calling on the Conservatives to stick with the program.

The new national government campaigned to shift funding directly to parents to purchase child care as they see fit. Campbell takes the view that Harper is merely keeping an election promise.

Softwood lumber. ......

Pine beetle. ...

Olympics. ....

Gateway. ....

Kelowna Accord....

Kyoto....

Senate reform.....

Equalization. The B.C. Liberals are starting to get a bad feeling about where the country is headed on this issue.

Quebec wants to change equalization in a way that would hurt B.C. The province is lobbying to add property values to the formula for calculating the provincial entitlement. B.C., with extraordinary high house prices in the Lower Mainland and southern Vancouver Island, would never see equalization dollars again....

But Stephen Harper is busy courting Quebec. And Campbell worries that the cost may be a change that would punish B.C., along with Alberta and Ontario.

Summarizing, the B.C. Liberals are comfortable with the new government's stance on the Olympics, softwood lumber and the fight against the pine beetle.

They have no problem with the change of direction on child care and Kyoto. They are indifferent on senate reform....

But after four months of pretty good relations, they may have to trade progress on some files for accommodation on others.